A Prediction Market User Made $436,000 on Bets Predicting Maduro's Downfall.
An individual profited close to $500,000 by predicting the removal of the Venezuelan leader immediately preceding it was officially announced, leading to inquiries about whether someone profited from inside knowledge of American actions.
Market Movement in Predictions
Predictions made on the forecasting site, an online prediction market, that the leader would be out of power by the end of January rose in the period preceding Donald Trump stated on January 3rd that Maduro had been taken into custody.
A single trader, which registered on the site recently and made four bets, all on Venezuela, profited a total of $nearly half a million from a initial bet of over $32,000.
Who placed the bet is a mystery. This unidentified trader had only a cryptographic address for identification.
Odds Fluctuate Before Announcement
Trading information shows that participants estimated the likelihood of a political change at just 6.5% in the midday period of Friday, January 2nd.
Yet the odds had jumped to over 10% by the end of the day and skyrocketed in the early hours of January 3rd, indicating a sudden change in betting activity right before the social media post was made.
"That trade has all the signs of a bet based on confidential knowledge," commented an industry expert.
A handful of other individuals also profited tens of thousands of dollars from similar wagers.
Regulatory Scrutiny Intensifies
Some lawmakers are growing concerned.
A new rule introduced on Monday aims to prohibit federal workers from participating on prediction markets if they have "material nonpublic information" related to a market.
Market Background
Prediction markets have become increasingly popular in the United States, with users able to bet on everything from sports outcomes to political events.
Prediction markets were examined under the previous administration. But it has found a more favorable environment during the present political climate.
Insider trading is against the law in the traditional financial markets, but there are fewer regulations in the prediction market industry.
An official representative for a competing service said their site "strictly forbids insider trading of any form."
